Blockchain : An Explication of a Decade Old Technology!

Introduction

One of the biggest technology stories of the last ten years is Blockchain. Although everyone is talking about it, Blockchain’s actual meaning and operation sometimes need to be clarified under the surface of discussion. Although Blockchain is renowned for being impenetrable, its core concept is relatively straightforward. Additionally, it has the power to completely transform entire sectors.

What is Blockchain? 

Through a decentralized network and cryptographic hashing, Blockchain, also known as distributed ledger technology or DLT, makes the history of any digital asset transparent and unalterable.

It’s easy to grasp how blockchain technology works by comparing it to Google Docs. A Google Doc cannot be duplicated or transferred when shared with a group of people; instead, it is distributed. 

Due to this, a decentralized distribution network is established, allowing everyone to simultaneously access the primary document. In addition, all revisions to the document are being logged in real-time, making changes visible, and no one is locked out due to waiting for transformation from another party.

Blockchain Features : 

• A blockchain is a sort of database or ledger where encrypted blocks of data regarding digital assets are kept chained together to create a real-time-based single source of truth.
• Instead of being copied and transferred, digital assets are distributed in the form of ledger.
• Because digital assets are decentralized, several parties on the chain can govern them on a real-time basis.
• Blockchain ledgers are transparent; all changes are recorded by upholding credibility.
• Blockchain technology is a top-notch choice for practically every industry since its ledgers are open to the public and built with built-in security features.

Why is it important today? 

Blockchain is a decentralized database that makes it easier to track digital assets and record transactions in a corporate network. An asset may be physical (such as a home, car, money, or land) or intangible (intellectual property, patents, copyrights, branding). On a blockchain network, practically anything of value may be recorded and traded, lowering risk and increasing efficiency for all parties.

Information is essential to every business. It is best if it is received fast and accurately. Blockchain is the best technology for delivering that information because it offers real-time, shareable, and entirely transparent data kept on an immutable ledger and accessible exclusively to members of a permissioned network.

Among other things, a blockchain network can track orders, payments, accounts, and production. Moreover, because everyone has access to the same version of the truth, you can see every aspect of a transaction from beginning to end, increasing your confidence and opening up new prospects.

Walmart, Pfizer, AIG, Siemens, Unilever, and numerous more businesses are just a few that have already adopted blockchain technology. For instance, IBM developed the Food Trust blockchain to track food goods’ routes to their destinations.

Why do this? The food sector has had numerous E. coli, salmonella, and listeria outbreaks, as well as the unintentional contamination of goods with dangerous substances. However, finding the origin of these outbreaks or the illness that results from what people consume has taken weeks. As a result, brands may follow a food product’s journey using Blockchain, from its origin through each stage along the way to its delivery.

Food contamination can be traced back through all stops until it reaches its original location. Additionally, because these businesses can now see everything else they may have come into contact with, problems can be identified far earlier, potentially saving lives. Although there are other ways to implement Blockchain, this is only one example.

How does Blockchain work?  

What is a block? 

Each block in a chain consists of many blocks, and each block has three fundamental components:

• The block comprises data.
• An ounce: “Number used just once” is the nonce. A nonce is a whole integer that is generated at a random level when a block is created in a blockchain, and it produces the block header hash.
• A hash is a number that is inextricably linked to the nonce on a blockchain. These values must contain many zeros at the beginning for Bitcoin hashes (i.e., be extremely small).

A nonce generates the cryptographic hash when the first block of a chain is formed. Unless it is mined, the data contained in the block is thought to be signed and permanently bound to the nonce and hash.

A miner: 

Mining is the process by which miners add new and upgraded blocks to the blockchain. Every block on the blockchain has its different nonce and hash, but it is also refers to the hashing algorithm of the blockchain before it is in the chain, making it extremely difficult to mine, especially on long blockchains.

Finding a nonce that produces a validated hash is a tricky arithmetic problem, and miners use specialized software to solve this issue. Since the hash refers to 256 bits, but the nonce is just 32 bits, it takes around four billion nonce-hash combinations to get the correct one. Miners claim to have discovered the “golden nonce” at that point, and their block is added to the chain.

Any block earlier in the chain may only be modified by re-mining every block following it, not simply the one with the modification. Because of this, it is challenging to abuse blockchain technology. Since identifying golden noses takes a lot of effort and processing power, think of it as “safety in math.”

When a block is successfully mined by the miner, the modification is accepted by all of the network’s nodes and participants, and the miner gets paid.

Decentralization: 

Decentralization is one of the key concepts behind blockchain technology. Any computer or entity will not be able to own the chain. Instead, it functions as a distributed ledger technology via the chain of nodes. Any electronic device that records copies of the blockchain and keeps the network running can be a blockchain node.

Each node or participant has its own copy of the Block, and for the chain to be updated, confirmed, and trusted the network must algorithmically approve every newly mined block. Due to the transparency of blockchains, every transaction in the ledger can be easily verified and inspected, resulting in built-in blockchain security. In addition, an exclusive alphanumeric identification number is supplied to each participant, which displays their transactions.

Blockchain can maintain integrity and foster user trust by fusing public information with checks and balances. Blockchains are the scalability of trust through technology.

Fundamental concepts of a blockchain: 

The name “blockchain” refers to storing transaction data in blocks connected to a chain. The Blockchain expands as more and more transactions are made on the chain. The time and order of transactions are copied and confirmed in blocks, which are added to the chain and governed by the rules established by the network’s users.

A hash, also known as a digital fingerprint or a one-of-a-kind identification, and the preceding block’s hash are all included in each block. A block cannot be changed or placed between two other blocks since the preceding block hash ties the blocks together.

• A ledger. An “append-only” distributed system of records shared across a business network is known as a shared ledger. A shared ledger eliminates the duplication of effort typical of conventional corporate networks by recording transactions once.
• Permissions. Transactions are secure, authenticated, and verifiable, thanks to permissions. Organizations can more easily adhere to data protection laws outlined in the Health Insurance Portability and Accountability Act or HIPAA and the EU General Data Protection Regulation with the option to restrict network participation (GDPR).
• Smart contracts. “An agreement or rules that govern a business transaction; it is kept on the blockchain and is performed automatically as part of a transaction,” according to the definition of a smart contract.

Is Blockchain safe and secure? 

Decentralized security and trust are made possible by blockchain technology in several ways. To start, new blocks are always chronologically and linearly stored. In other words, they are constantly added to the Blockchain’s “end.” Therefore, it is easier to go back and change the contents of a block once it has been added to the Blockchain if a majority of the network has agreed to do so. 

This is because each block has its hash, the hash of the blockchain that came before it, and the date, as mentioned earlier. A mathematical function that converts digital information into a string of letters produces hash codes. The hash code also changes if that data is altered in any way.

Imagine a hacker who manages a blockchain node wanting to change a blockchain and take everyone else’s cryptocurrency. If they changed their copy, it wouldn’t match the copies made by everyone else. When everyone compares their copies to one another, they will notice that this one copy stands out, and the hacker’s version of the chain will be rejected as fraudulent.

For such a hack to be successful, the hacker would need to simultaneously control and change at least 51 percent of the blockchain copies, making their new copy the majority copy and, thus, the agreed-upon chain. The need to rewrite every block because their timestamps and hash codes had changed would make such an attack extremely expensive and resource-intensive.

The expense to pull off such a feat is probably impossible due to the size of many cryptocurrency networks and how quickly they are developing. Therefore, this would be highly expensive and probably useless.

As network participants would observe such significant changes to the Blockchain, doing such a thing would not go unnoticed. The network’s users would then abruptly switch to an unaffected chain version. As a result, the token version that was attacked would lose value, rendering the attack useless because the malicious party would be in control of a worthless asset. 

The same would happen if the malicious party targeted Bitcoin’s most recent fork. As a result, participating in the network is much more economically advantageous than assaulting it.

Conclusion: 

Unprecedented growth in blockchain technology enabled innovative ideas for social networks and shared storage, among other things. From a security standpoint, we are pioneering. Developers should prioritize protecting their blockchain services and apps as they create blockchain applications. 

A developer’s roadmap for a blockchain application should include tasks like conducting risk assessments, developing threat models, and doing code analysis, including static code analysis, and software composition analysis. A good and secure blockchain application must incorporate security from the beginning.